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T H E C A B I N E T
S T A T E O F F L O R I D A
_____________________________________________________
Representing:
STATE BOARD OF ADMINISTRATION
DIVISION OF BOND FINANCE
FINANCIAL SERVICES COMMISSION
DEPARTMENT OF HIGHWAY SAFETY AND MOTOR VEHICLES
ADMINISTRATION COMMISSION
FLORIDA LAND AND WATER ADJUDICATORY COMMISSION
SITING BOARD
BOARD OF TRUSTEES OF THE INTERNAL IMPROVEMENT TRUST
FUND
The above agencies came to be heard before
THE FLORIDA CABINET, Honorable Governor Bush presiding,
in the Cabinet Meeting Room, LL-03, The Capitol,
Tallahassee, Florida, on Tuesday, August 12, 2003
commencing at approximately 9:25 a.m.
Reported by:
SANDRA L. NARGIZ
Registered Professional Reporter
Registered Merit Reporter
Certified Realtime Reporter
ACCURATE STENOTYPE REPORTERS, INC.
2894A REMINGTON GREEN LANE
TALLAHASSEE, FL 32308 (850)878-2221
. 2
APPEARANCES:
Representing the Florida Cabinet:
JEB BUSH
Governor
CHARLIE CRIST
Attorney General
TOM GALLAGHER
Chief Financial Officer
* * *
. 3
I N D E X
ITEM ACTION PAGE
STATE BOARD OF ADMINISTRATION
(Presented by Coleman Stipanovich)
1 Approved 7
2 Approved 7
3 Approved 7
4 Approved 8
5 Approved 8
6 Approved 8
7 Approved 9
8 Approved 23
DIVISION OF BOND FINANCE
(Presented by Ben Watkins, Jr.)
ITEM ACTION PAGE
1 Approved 24
2 Approved 24
3 Approved 24
4 Approved 25
5 Approved 25
6 Approved 26
FINANCIAL SERVICES COMMISSION
(Presented by Kevin McCarty)
ITEM ACTION PAGE
1 Approved 30
2 Approved 30
3 Approved 31
4 Approved 31
5 Approved 31
DEPARTMENT OF HIGHWAY SAFETY AND MOTOR VEHICLES
(Presented by Fred Dickinson)
ITEM ACTION PAGE
1 Approved 36
2 Approved 39
3 Approved 45
4 Approved 54
5 Approved 59
. 4
ADMINISTRATION COMMISSION
(Presented by Teresa Tinker)
ITEM ACTION PAGE
1 Approved 62
2 Deferred 61
3 Settled/Approved 82
FLORIDA LAND AND WATER ADJUDICATORY COMMISSION
(Presented by Steve Palmer)
ITEM ACTION PAGE
1 Approved 83
2 Approved 83
3 Approved 84
SITING BOARD
(Presented by Teresa Tinker)
ITEM ACTION PAGE
1 Approved 85
2 Approved 86
BOARD OF TRUSTEES
(Presented by David Struhs)
ITEM ACTION PAGE
1 Approved 87
2 Deferred 87
3 Approved 88
4 Approved 88
5 Approved 89
6 Deferred 89
7 Approved 89
8 Deferred 93
9 Approved 93
10 Deferred 94
11 Deferred 94
12 Deferred 94
13 Approved 97
CERTIFICATE OF REPORTER 98
. 5
1 P R O C E E D I N G S
2 (The agenda items commenced at 9:25 a.m.)
3 GOVERNOR BUSH: I think the next Cabinet
4 meeting is Tuesday, August 26, 2003. We'll check.
5 I am more than happy to show up next week,
6 too.
7 CFO GALLAGHER: I don't want to be here by
8 myself, I can tell you that.
9 GOVERNOR BUSH: The City of Miami charter and
10 code allows the Governor and Cabinet an
11 appointment to the Miami Downtown Development
12 Authority Board of Directors.
13 The board is composed of 15 members who
14 commit their time and expertise to the economic
15 development of Downtown Miami, and they have
16 done a very good job over the years.
17 Last Mr. Tony Crapps, Sr. was appointed to
18 serve the remainder of Jack Peeples' term.
19 Jack was the previous Governor and Cabinet
20 appointee. That term is set to expire on
21 August 31st, 2003.
22 Tony Crapps is the assistant county
23 manager in Miami-Dade County with 25 years
24 experience in the urban and community
25 development process. The board of directors
. 6
1 has now asked us to submit an appointment to
2 the city for confirmation.
3 CFO GALLAGHER: I will move Tony Crapps.
4 GENERAL CRIST: Second.
5 GOVERNOR BUSH: There is a motion and a
6 second to nominate Tony Crapps for a new term.
7 Without objection, the motion passes.
8 As it relates to the Parole Commission,
9 today we have a vote on filling the vacancy
10 that was created this year.
11 CFO GALLAGHER: Governor, on that, there is
12 one candidate that I have not had a chance to
13 interview with yet, so I would like to hold that
14 off until the next meeting if we could, please.
15 GOVERNOR BUSH: All right. Do you have any
16 objection to that?
17 GENERAL CRIST: Not if you don't.
18 GOVERNOR BUSH: I am prepared to do it now,
19 but if you haven't met all three, then it's
20 appropriate that you do so.
21 So we will delay that to August 26.
22 State Board of Administration.
23 CFO GALLAGHER: Motion on the minutes.
24 GENERAL CRIST: Second.
25 GOVERNOR BUSH: There is a motion and a
. 7
1 second on item 1. The item passes out objection.
2 Item 2.
3 MR. STAPANOVICH: Thank you, Governor,
4 members.
5 Item 2, approval of fiscal sufficiency of
6 an amount not exceeding $300 million, State of
7 Florida, Full Faith and Credit, State Board of
8 Education, Public Education Capital Outlay
9 Bonds, 2003 series. Request approval.
10 CFO GALLAGHER: Motion.
11 GENERAL CRIST: Second.
12 GOVERNOR BUSH: There is a motion and second.
13 Without objection the item passes.
14 MR. STAPANOVICH: Item 3, request approval of
15 fiscal sufficiency of an amount not exceeding 150
16 million, State of Florida, Department of
17 Environmental Protection, Florida Forever Revenue
18 Bonds, Series 2003C.
19 GENERAL CRIST: Motion.
20 CFO GALLAGHER: Second.
21 GOVERNOR BUSH: Moved and seconded. Without
22 objection, the item passes.
23 MR. STAPANOVICH: Item 4, request approval of
24 fiscal determination of amounts not exceeding $15
25 million tax exempt and $2 million taxable Florida
. 8
1 Housing Finance Corporation Multifamily Mortgage
2 Revenue Bonds, 2003 series.
3 GENERAL CRIST: Motion.
4 CFO GALLAGHER: Second.
5 GOVERNOR BUSH: Moved and seconded. Without
6 objection, the item passes.
7 MR. STAPANOVICH: Item 5, request approval of
8 fiscal determination of an increase in an amount
9 not exceeding 500,000 tax exempt Florida Housing
10 Finance Corporation, Multifamily Mortgage Revenue
11 Bonds, 2003 series.
12 CFO GALLAGHER: Motion.
13 GENERAL CRIST: Second.
14 GOVERNOR BUSH: Moved and seconded. Without
15 objection, the item passes.
16 MR. STAPANOVICH: Item 6, request approval
17 fiscal determination of an amount not exceeding $6
18 million 500,000 tax exempt, Florida Housing
19 Finance Corporation, Multifamily Mortgage Revenue
20 Bonds, 2003 series.
21 GENERAL CRIST: Motion.
22 CFO GALLAGHER: Second.
23 GOVERNOR BUSH: Moved and seconded. Without
24 objection, the item passes.
25 MR. STAPANOVICH: Item 7, request approval of
. 9
1 fiscal determination of amounts not exceeding $4
2 million 600,000 tax exempt and 500,000 taxable
3 Florida Housing Finance Corporation Multifamily
4 Mortgage Revenue Bonds, 2003 series.
5 GENERAL CRIST: Motion.
6 CFO GALLAGHER: Second.
7 GOVERNOR BUSH: Moved and seconded. Without
8 objection, the item passes.
9 MR. STAPANOVICH: Item 8, Governor and
10 Members, I will try to be brief. I know you've
11 got a busy Cabinet agenda, I keep it down to 15 or
12 20 minutes and answer any of your questions.
13 GOVERNOR BUSH: Keep it down to 15 or 20
14 minutes?
15 CFO GALLAGHER: How about 15 or 20 seconds?
16 MR. STAPANOVICH: Okay. In that case,
17 Treasurer --
18 GOVERNOR BUSH: Maybe we can split the
19 difference. I think we probably have a duty to
20 hear the thinking behind the changes, but I don't
21 think we need 15 minutes worth of explanation.
22 CFO GALLAGHER: Most of us have been through
23 this at least once and had an opportunity to ask
24 you questions, if we had them. Why don't you rip
25 through it, if you will.
. 10
1 MR. STAPANOVICH: This agenda item represents
2 the final phase of a complete review and update of
3 the Florida Retirement System Investment Plan.
4 And we are recommending for those two very
5 difficult asset classes, which are the liquid
6 classes and private asset classes, dual
7 benchmarks; and in the case of the alternative
8 investments asset class, we are recommending a
9 450-basis point premium over the target index
10 which is a Russell 3000.
11 And for the real estate investment asset
12 class, we are recommending flip-flopping the
13 secondary benchmark that exists today, which is
14 the cost of living plus 450 basis points; 400
15 basis points represents our investment
16 objective, and 50 basis points represents a
17 risk premium for the illiquidity of that asset
18 class.
19 And so the primary benchmark again would
20 be 450 basis points over the cost of living.
21 In addition to that, which are just
22 secondary benchmarks which focus on the
23 short-term -- the long-term primary benchmark
24 focuses on the long-term -- in the case of the
25 secondary benchmarks, which are primarily for
. 11
1 internal use, what we were attempting to do at
2 a very high level, simply drill down and have
3 subasset class benchmarks that we can do peer
4 comparisons against and really look at the
5 short-term performance, which would be like one
6 and three-year performances at the subasset
7 class level, using secondary benchmarks which
8 is outlined in the total fund investment policy
9 which is before you for action today.
10 GOVERNOR BUSH: Any discussion?
11 CFO GALLAGHER: I do have a question. We are
12 moving to a Russell 3000 plus 450 basis points,
13 and we are the fourth largest fund: California
14 Public Employees, New York State Common;
15 California State Teachers, and then us; then the
16 Texas State Teachers.
17 All of those -- and New York State
18 Teachers, New York City Retirement -- are 500
19 basis points above either the Russell 2000 or
20 the Wilshire 2500 and Standard and Poors.
21 And I am wondering, this is sort of a goal
22 that we are trying to do. Don't we short
23 ourselves by having a 50-basis point lower
24 goal? In other words, it lowers the challenge
25 that we have not only internally but for the
. 12
1 managers that we hire.
2 MR. STAPANOVICH: That's an excellent
3 question; and you are making reference to, which I
4 provided in the backup material, an independent
5 study done by our journal consultant, Ennis-Knupp
6 where they went out and surveyed 48 public funds
7 across the country.
8 You have been given a list of the top 25
9 public funds which you made reference to,
10 Treasurer, citing the top five, of which we are
11 four of the top five, and the most common
12 opportunity set is the Russell 3000, but the
13 next is the S&P 500.
14 What we don't know is if those are under
15 review with those particular public funds and
16 would they possibly be adjusting downward; we
17 don't know the answer to that, which is what we
18 are doing because of the new calculations based
19 on, as you know, the investment/debt to equity
20 ratios that were calculated back in '99 versus
21 2002.
22 Another consideration, when you see the
23 500-basis points above, they are using the S&P
24 500. In some cases, you have Texas Teachers
25 using 3000; New York uses a 500; New York
. 13
1 Teachers uses the 500, they are the top two or
2 three. The S&P 500 certainly is not -- doesn't
3 have the small cap exposure that the Russell
4 3000 does.
5 So ours is a broader, more inclusive index
6 in terms of small cap, which you would think
7 increases the volatility and the rate of return
8 of the long-term.
9 So one could possibly argue that that is a
10 tougher benchmark which helps account for maybe
11 the 450 basis points.
12 This is not an exact science. The range,
13 as you see in the report for public funds, goes
14 anywhere from 200 to 450, 500 basis points.
15 The average for the survey that was done was
16 424 basis points. We are at 450.
17 So there are a number of other
18 considerations, but certainly 500, in terms of
19 what -- the funds you mentioned would not be
20 inappropriate, but we certainly looked at that
21 and considered that and still came away with
22 the recommendation of 450.
23 CFO GALLAGHER: What would you say is where
24 we are today? Where are we today in regards to
25 the index and the premium earned?
. 14
1 MR. STAPANOVICH: 600 basis points today.
2 CFO GALLAGHER: And we used to set a goal of
3 -- think about this -- 600 -- and now all of a
4 sudden, the way I look at it, is we are whimping
5 down to 450 as our goal.
6 I just think that's just a long way down
7 to go. I don't know how far we missed the 600.
8 MR. STAPANOVICH: The process is, Treasurer,
9 when we do these kinds of studies, that's a good
10 perception question: Why did we go from 600 to
11 450; we are lowering the benchmark and making your
12 job easier.
13 GOVERNOR BUSH: We done it already with
14 common stock.
15 MR. STAPANOVICH: Well, it's really -- the
16 primary driver of this, and one of the legs in the
17 stool we like to do is go out and look at our
18 peers so we can show the board our peers and see
19 what they are doing. That's a nice context to put
20 it in.
21 But when you use the same methodology in
22 the calculations that were done in '99 with
23 what's happened in the market, market
24 calculations, debt-to-equity ratios, public
25 versus private market, the number today would
. 15
1 literally be 150 plus the idiosyncratic special
2 risk premium of 150, would literally be 300.
3 When you look at the range of the funds,
4 it's 250 to 500, no one in the country that we
5 are aware of is above 500. So to set -- to
6 keep the benchmark at 600, if we basically want
7 to set the bar so high that we will not beat
8 our benchmark -- and eventually if you are not
9 beating your benchmark, maybe you should
10 consider doing away with the asset class and
11 set ourselves up a fairy, we could do that.
12 But we think this is the high end of risk
13 premium, overlaid on appropriate opportunity
14 set, which is the Russell 3,000.
15 We are not going to quibble over 50 basis
16 points. Like I said, it's not an exact science
17 but we did take that into consideration, that
18 there are a number, several other funds that
19 are at 500.
20 But again, those are based off of --
21 again, we don't know if they are going to be
22 revising downward. We are doing our revisions
23 now. And like many of them, they followed us
24 in asset allocation.
25 When we did our asset allocation, a lot of
. 16
1 funds, in terms of comparing and comparing
2 ourselves, they had not done their asset
3 allocation studies. And they had; and guess
4 what, they are reducing their exposures along
5 the same lines that we did our increasing
6 exposures. So there is some unknowns here and
7 either way, we --
8 CFO GALLAGHER: The reason I mention this is
9 the problem with benchmarks is that when you have
10 one, everybody that -- if you have outside money
11 managers and they are meeting the benchmark, and
12 let's say they are all meeting it. All of a
13 sudden they all say: You can't fire us because we
14 are above what your benchmark is, even though
15 there is guys that are really doing well in
16 comparison.
17 So to have a benchmark that ends up being
18 one that everybody can meet because of 50
19 points, aren't you better off having one that
20 half the people meet it and half of them don't,
21 and then you can start moving out the people
22 that don't?
23 And that's what we do in the treasury; we
24 move them out. And we add people that are
25 going to stay above what our benchmark is
. 17
1 instead of below, as opposed to having too low
2 a one.
3 MR. STAPANOVICH: That's a good point. I
4 believe we have addressed that in the past year as
5 something we did not have that we have today, is
6 performance monitoring guidelines for the
7 investment advisors.
8 And it's attached to their contract now.
9 And part of -- there is a number of criteria
10 that's in those guidelines, and that literally
11 is what they have to meet or they get put on
12 probationary status and eventually get
13 terminated.
14 As you know, and you have been around this
15 business a long time, it's not an exact
16 science, it's still much of an art. But we
17 have quantified a lot of those things.
18 One of the elements is percentile ranking
19 among peers, among many other considerations
20 and where you rank. So we have addressed that.
21 CFO GALLAGHER: You are comfortable that one
22 of our managers could be at 450, maybe 475 above
23 the Russell 3000, and you could still remove them
24 without them having a good excuse of why they
25 ought to be staying?
. 18
1 MR. STAPANOVICH: Yes, sir, we could. Now it
2 would not probably be for performance versus
3 benchmark. It might be performance versus the
4 peers, might be a factor; it might be some
5 organizational changes that have taken place in
6 their organization.
7 There are a number of things in the form
8 of monitoring guidelines that we look at that
9 leads us to another -- other factors we looked
10 at that could lead us to a conclusion to
11 terminate them when, in fact, they are beating
12 our benchmark. That's not the sole criteria we
13 look at.
14 CFO GALLAGHER: My gut tells me -- I am going
15 to go along with whatever the majority wants, but
16 my gut tells me that if other people are going to
17 downgrade, we are ought to be the last one or
18 middle one to do it, not the first one, because
19 that's what's going to happen is we go to 450 and
20 California and New York are going to say: Hey,
21 Florida went to 450, we need to go to 450. And
22 the next thing you know is we are the leader in
23 lowering expectations for our pension fund and
24 everybody else's. That's just my opinion.
25 MR. STAPANOVICH: As I am sure you are aware,
. 19
1 we spent considerable time researching this. We
2 certainly, in looking at that, we always like to
3 be at the high end. We realize we're one of the
4 few funds were at the 500 basis points.
5 Again, we had our independent consultants
6 look at it. We had the investment advisory
7 council review it, and with the total
8 membership advisory council being there, it was
9 approved unanimously, as you aware of.
10 So this is not something, an oversight on
11 our part. It certainly is not problematic;
12 it's at the pleasure of the board as to what
13 they want to do, and I don't see where the bar
14 is set so high at 500 that it's problematic and
15 you are setting us up for failures. But again,
16 our recommendation is appropriate.
17 CFO GALLAGHER: Just realize that that's a
18 25 percent cut, from 600 to 450. That's a pretty
19 good size.
20 MR. STAPANOVICH: I understand, Treasurer,
21 but I am not too sure how relevant that is in
22 terms of the methodology that is consistent in
23 terms of what gives you that number.
24 The fact the markets have changed and that
25 number is what it is; to manipulate it and say:
. 20
1 Gosh, that looks like a big drop, we shouldn't
2 do that -- to me is not based on research. And
3 this recommendation is based on research.
4 GOVERNOR BUSH: This is not just about
5 return; it's also about risk. And if the general
6 market in each one of these categories has shifted
7 downward in terms of the projected returns, to be
8 at the highest end, you are also expecting the
9 highest risk. And I am not sure that's -- there
10 is a balance here.
11 CFO GALLAGHER: We expect the Russell 3000
12 risk, is what we expect, and that's why the
13 benchmark is set.
14 GOVERNOR BUSH: These are high-risk
15 investments that have shown, based on the
16 research, that there is now projected returns at
17 lower rates than had you made the evaluation four
18 or five years ago.
19 And just as the common stock and
20 international stocks, as we were told, at least
21 the lesson when we went through this, the
22 states -- at that time you said that we were --
23 many other states were doing the same thing we
24 were doing. I assume that's going on right now
25 as well?
. 21
1 MR. STAPANOVICH: The other thing I mention,
2 too, Treasurer -- maybe this will help you, and
3 you are very much aware of the J curve; you and I
4 talked about that in our discussions.
5 We now have removed the J curve and other
6 funds are doing something like the J curve,
7 maybe not exactly the J curve, but they are
8 making allowances for these young partnerships.
9 We have removed that, which actually, when
10 you factor that in where we are today, it helps
11 reduce your performance; that kind of factors
12 out and ignores bad performance in the early
13 years.
14 We are saying now, we are not going to do
15 that any more. We are going to remove the J
16 curve and it is what it is, so we'll take those
17 performances.
18 CFO GALLAGHER: That's probably the best
19 argument for having the 450, in my opinion,
20 because the J curve did allow early years to show
21 a lesser return than five years.
22 MR. STAPANOVICH: Those would be kind of
23 three things, Treasurer, it would be the J curve
24 removal, possibly the opportunities --
25 TREASURER GALLAGHER: One other thing,
. 22
1 though, is that if you get too much lower on what
2 you are doing here, then I start wondering why we
3 are even in the alternative type investments; we
4 ought to stick with the gravy.
5 MR. STAPANOVICH: I agree.
6 CFO GALLAGHER: So I don't want to see us get
7 down too low here, because we are putting
8 ourselves at risk and we are not expecting that
9 much return.
10 MR. STAPANOVICH: Again, part of the process,
11 very briefly I will touch on the process.
12 What we expect from our general
13 consultants, the quickest way you can get
14 terminated as a consultant with the State Board
15 of Administration is tell us what you think we
16 want to hear. We hire those people --
17 CFO GALLAGHER: That's one of my problems
18 with all of this.
19 MR. STAPANOVICH: We hire those people to be
20 independent consultants to go out, and they are
21 working all across the country in looking at what
22 people are doing and having good a client base for
23 doing.
24 They are then to come back to us with
25 independent recommendations. And in the
. 23
1 meantime, we have very competent staff that's
2 doing due diligence. So we have dual diligence
3 track going on.
4 And in this case, there was convergence
5 where the independent consultant was very close
6 to where we were. And again, then we take it
7 to the Investment Advisory Council, which we
8 have two people that are very well versed --
9 MBA, Harvard background, your appointments,
10 Treasurer -- that are on there that have a lot
11 of experience in alternative investments, that
12 actually think that -- anyway, they are in
13 total concurrence. And again, the entire
14 council is. Again, this has had good due
15 diligence.
16 CFO GALLAGHER: I move item 8.
17 GOVERNOR BUSH: Is there a second?
18 GENERAL CRIST: Second.
19 GOVERNOR BUSH: Moved and second, with
20 spirited debate. No objections, the item passes.
21 MR. STAPANOVICH: Governor, we don't need to
22 address the floating question, because it's part
23 of agenda item 8.
24 GOVERNOR BUSH: Great. Thank you.
25 CFO GALLAGHER: Thank you, Coleman.
. 24
1 GOVERNOR BUSH: Division of Bond Finance.
2 CFO GALLAGHER: Motion on the minutes.
3 GENERAL CRIST: Second.
4 GOVERNOR BUSH: Moved and seconded. Without
5 objection, the item passes.
6 Item 2.
7 MR. WATKINS: Item 2 is a resolution
8 authorizing the issuance of up to $516.3 million
9 of Public Education Capital Outlay Bonds and the
10 competitive sale of up to $300 million of that
11 authorization.
12 CFO GALLAGHER: Motion.
13 GENERAL CRIST: Second.
14 GOVERNOR BUSH: Moved and seconded. Without
15 objection, the item passes.
16 MR. WATKINS: Item number 3 is a resolution
17 authorizing the competitive sale of up to $150
18 million dollars in Florida Forever bonds.
19 GENERAL CRIST: Motion.
20 CFO GALLAGHER: Second.
21 GOVERNOR BUSH: Moved and seconded. Without
22 objection, the item passes.
23 MR. WATKINS: Item number 4 is a resolution
24 authorizing the issuance of up to $600 million in
25 Lottery Revenue Bonds to provide funding for
. 25
1 programs established by the legislature to
2 implement the constitutional amendment requiring
3 class size reduction.
4 CFO GALLAGHER: Motion on 4.
5 GENERAL CRIST: Second.
6 GOVERNOR BUSH: Moved and seconded;
7 reluctantly, without objection, the item passes.
8 MR. WATKINS: Item number 5 is a report of
9 award on the competitive sale of $44.6 million in
10 capital outlay bonds for school construction. The
11 bonds were awarded to the low bidder at a true
12 interest cost of 3.96 percent.
13 GENERAL CRIST: Motion.
14 CFO GALLAGHER: Second.
15 GOVERNOR BUSH: Moved and seconded. Without
16 objection, the item passes.
17 MR. WATKINS: Item number 6 is a report of
18 award on the competitive sale of $303.9 million in
19 turnpike refunding bonds.
20 The bonds were awarded to the low bidder
21 at a true interest cost of 4.44 percent,
22 generating gross debt service savings to the
23 state of approximately $37 million or on a
24 present value basis $24.7 million.
25 GENERAL CRIST: Motion.
. 26
1 CFO GALLAGHER: Second.
2 GOVERNOR BUSH: Moved and seconded. Without
3 objection, the item passes.
4 MR. WATKINS: To give you sort of an update
5 on the score card on refinancings that have
6 occurred during this calendar year, we have
7 executed 12 transactions totaling $2 billion,
8 generating debt service savings to the state of
9 $250 million.
10 So my expectation is with respect to where
11 we are with interest rates, we have done
12 everything that's economically feasible to do
13 at this point in time.
14 There has been a pretty precipitous rise
15 in rates over the last six weeks, so we are --
16 we don't have any deals that are in the money,
17 but we did, while the market conditions were
18 right, do everything humanly possible to lower
19 the overall debt burden of the state by
20 lowering our interest costs.
21 GOVERNOR BUSH: Out of curiosity, what
22 percentage of the debt was refinanced?
23 MR. WATKINS: We got about 19 billion
24 outstanding, and we refinanced 2 billion of the
25 19 billion outstanding. And if Congress could
. 27
1 have had it in its wisdom, we are only limited --
2 we can only refinance one time. So that's --
3 there is an artificial constraint. If I went back
4 and looked over a longer period of time, Governor,
5 probably over the last five years, I would say
6 maybe a third of our debt has been refinanced.
7 And if, like our home mortgage, we didn't
8 have a tax limitation on the number of times we
9 could do it, we could have done a lot more.
10 But with the tax restrictions, you get one shot
11 at it and that's it.
12 CFO GALLAGHER: There is no restriction for
13 bringing them back and doing taxables, though,
14 Right?
15 MR. WATKINS: Right.
16 CFO GALLAGHER: Some of these might -- we did
17 some back when it was six and seven, thinking we
18 got a great deal.
19 Have you looked at the taxable side to see
20 if we might be able to find ourselves in a good
21 position there?
22 MR. WATKINS: We continually monitor the
23 ratios of tax exempt to taxables; and normally it
24 doesn't make sense. There had been some periods
25 of time where that relationship, when tax exempts
. 28
1 yielded more than treasuries, but that is an
2 unusual circumstance. And it didn't make sense
3 for us to do any of that.
4 CFO GALLAGHER: I didn't expect tax exempts
5 to be lower than treasuries. But what I am
6 thinking is tax exempts could be in the five range
7 and we are sitting at a seven, and we already
8 refin'd to get it to seven; going to five might be
9 worthwhile even though it's taxable.
10 MR. WATKINS: We'll take a look at that and
11 make sure we are not missing any opportunities
12 there.
13 CFO GALLAGHER: It's something you might not
14 think of because you live, eat, sleep and live in
15 a tax-free market.
16 MR. WATKINS: That's right, that's not an
17 analysis we would typically do.
18 CFO GALLAGHER: If you have 5, 6 and 7, we
19 might be able to switch and we can do that without
20 restriction.
21 MR. WATKINS: We'll take a look at that, make
22 sure we are not missing something there.
23 Good suggestion.
24 GOVERNOR BUSH: Thank you for asking such
25 good questions while I was over there.
. 29
1 CFO GALLAGHER: Just keeping him busy.
2
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. 30
1 GOVERNOR BUSH: Financial Services
2 Commission. How are you doing?
3 CFO GALLAGHER: Move the minutes.
4 GENERAL CRIST: Second.
5 GOVERNOR BUSH: Moved and seconded. Without
6 objection, item passes.
7 Item 2.
8 MR. McCARTY: Item 2 amends Rule 4-143.0007,
9 008, and 015 which conforms the existing rule to
10 revised statutory standards.
11 CFO GALLAGHER: Motion on 2.
12 GENERAL CRIST: Second.
13 GOVERNOR BUSH: Moved and seconded. Without
14 objection, the item passes.
15 MR. McCARTY: Items 3, 4 and 5 are a
16 continuation of our attempt to get electronic
17 filing. These are to eliminate paper filings and
18 require them to be made in electronic format.
19 CFO GALLAGHER: Motion on 3, 4 and 5.
20 GENERAL CRIST: Second.
21 MR. McCARTY: Agenda Item 5 adopts --
22 GOVERNOR BUSH: Hold on a second.
23 CFO GALLAGHER: You just did 3, 4 and 5,
24 right?
25 GOVERNOR BUSH: Items 3,4 and 5; there is a
. 31
1 motion and a second. Without objection, it
2 passes.
3 MR. McCARTY: There is one additional item
4 that I don't have on the agenda. Treasurer
5 Gallagher asked that I give the members of the
6 Financial Services Commission an update on the
7 implementation of Senate Bill 50A, which is an act
8 relating to the reform of the worker's
9 compensation.
10 As you all are well aware, worker's comp
11 rates in Florida was stifling economic
12 development in Florida. In response, the
13 legislature enacted many of the recommendations
14 of the Governor's Commissions on Workers'
15 Coverage Reform and the House Select Committee
16 on Workers' Compensation.
17 I am happy to announce that after the
18 Governor signed that in to law, our office
19 issued a order to the National Council on
20 Compensation Insurance, which is our state
21 rating organization, and asked them to make a
22 filing reflective of the changes of the
23 Workers' Compensation Act.
24 On July 18 the Council made a filing with
25 our office, and we are pleased to announce we
. 32
1 will be issuing an order today approving that
2 filing, which would reflect a 14 percent
3 decrease across-the-board for rates for
4 employers in the State of Florida for workers'
5 comp, effective for policies issued on and
6 after October 1st.
7 It will also, for those policies in
8 effect, will reflect the decrease for the --
9 prorated for the rest of the policy period
10 after October 1st.
11 CFO GALLAGHER: Is there a -- is there --
12 when we are going through the session, it looked
13 like the estimates showed that one of our biggest
14 problems, of course, is construction -- that it
15 was going to have a 16, an extra 2 or 4 -- I can't
16 remember which it was. So is there an additional
17 cut for the construction industry?
18 MR. McCARTY: The 14 percent is across the
19 board.
20 CFO GALLAGHER: So that's an average across
21 the board?
22 MR. McCARTY: That's correct.
23 CFO GALLAGHER: Does that mean that the
24 construction code will most likely have an
25 increase?
. 33
1 MR. McCARTY: No, all codes, it is an
2 across-the-board 14 percent.
3 CFO GALLAGHER: Whatever you have today,
4 whatever your mod is today, whatever is going on
5 today, you are going to get a 14 percent decrease
6 from, what, October 1st on?
7 MR. McCARTY: That's correct. It would be
8 new policies, it will be reflected on
9 automatically. For those policies already in
10 effect, it will be pro rated depending on when the
11 policy took effect.
12 GOVERNOR BUSH: What happened to the extra
13 premium reductions that were estimated in the
14 bill, in the construction industry?
15 CFO GALLAGHER: I think they averaged them
16 out and passed it across everybody, is what it
17 sounds like.
18 MR. McCARTY: The increase was for increased
19 compliance, which would be reflective in the
20 overall amount of premium collected. It's not one
21 that's specific to a scope's code or a code
22 relevant to --
23 GOVERNOR BUSH: So the extra reduction that
24 was discussed, which we all embraced and thought
25 was a good idea--, could happen, but not because
. 34
1 of the statutory changes, relates to the
2 administration?
3 Are you saying it's not going to happen?
4 MR. McCARTY: It's not going to happen. It's
5 14 across the board.
6 CFO GALLAGHER: What they were estimating was
7 12 and 16, if I remember correctly.
8 GOVERNOR BUSH: No, it was 14 and 16 and a
9 half. I remember well. 14.1 even down to the
10 point which I am always -- when we have this
11 medical malpractice insurance issue, we can't even
12 get a common set of data. With workers' comp, you
13 can get it down to a tenth of a percent; makes you
14 wonder.
15 MR. McCARTY: Some of those figures are
16 judgmentally derived. You have to make estimates
17 on certain assumptions that you make in any
18 actuarial determination as to what the effect of
19 the law would have, assuming how much more premium
20 you will accept because of compliance, how much
21 more premium will be generated because of efforts
22 to eliminate fraud.
23 Still, you would still have to make
24 judgmental calls, but it is interesting how you
25 come down to tenths of a percent.
. 35
1 GOVERNOR BUSH: All right. Thank you.
2
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. 36
1 GOVERNOR BUSH: Department of Highway Safety
2 and Motor Vehicles.
3 CFO GALLAGHER: Motion on the minutes.
4 GENERAL CRIST: Second.
5 GOVERNOR BUSH: Moved and seconded. Without
6 objection, the item passes.
7 Item 2.
8 MR. DICKINSON: Governor, item 2 is our
9 quarterly report for the quarter ending
10 March 2003.
11 I tell you, we have shown some increases,
12 particularly in Internet renewal; we are up
13 55 percent over this time last year. And one
14 out of every five people now are visiting our
15 website and renewing through the mail, phone in
16 or the Internet.
17 GENERAL CRIST: I am sorry, Fred, what did
18 you say?
19 MR. DICKINSON: Driver's license renewals; we
20 have one-fifth of our -- 20 percent of our people
21 are now renewing via Internet, mail, or phone in
22 which keeps them out of our office.
23 Last quarter -- or this quarter we are
24 talking about it was about 269,000 of the 1.3
25 million that visited our offices. So we are
. 37
1 having some success there in the bill that the
2 Governor just signed that I will go into a
3 little bit later dealing with eye tests for the
4 elderly driver; we are developing an Internet
5 website where they can come across the web to
6 report that.
7 GOVERNOR BUSH: Is there a motion on item 2?
8 GENERAL CRIST: Motion.
9 CFO GALLAGHER: Fred, written warnings, down
10 22 percent from same quarter last year?
11 MR. DICKINSON: Yes. Mr. Treasurer, I would
12 say there are a number of items that are down with
13 regard to the patrol. And let me point out, I can
14 get into bits and pieces on it. But they are up
15 in particularly DUI, which takes so much more
16 time.
17 We probably are not spending enough time
18 out on the road; probably doing too much crash
19 reporting. But yes, that is down substantially
20 and we pay attention to that, but most of our
21 other items are in the plus category.
22 CFO GALLAGHER: 13 percent decrease in
23 speeding tickets?
24 MR. DICKINSON: There again, when you got
25 them out doing the special details, and we are
. 38
1 trying to concentrate a little bit more on DUI.
2 CFO GALLAGHER: What did we do on DUI
3 numbers? Is that an increase?
4 MR. DICKINSON: Yes, that was, 200 of the --
5 let's see, we are up 200 over the same quarter
6 last year. We do about 1300 -- 3,000.
7 CFO GALLAGHER: If I had my choice, I would
8 rather have you get the DUIs off the road as
9 opposed to the speeders.
10 MR. DICKINSON: We had a little problem with
11 DUI in the last couple of years, they have been
12 creeping upward; so we are trying to concentrate a
13 little more in that area.
14 CFO GALLAGHER: It's a good one to
15 concentrate on one.
16 MR. DICKINSON: Yes, sir, and we are not
17 having a very good fatality year. We are up about
18 60 fatalities over this time last year and we have
19 been creeping up the last couple of years.
20 CFO GALLAGHER: Is that DUI or speeding?
21 MR. DICKINSON: This is total fatalities.
22 CFO GALLAGHER: You always put down what you
23 think the cause was; speeding causes a lot of
24 them, I know. DUIs --
25 MR. DICKINSON: 30 percent.
. 39
1 CFO GALLAGHER: 30 percent are DUIs?
2 MR. DICKINSON: Yes, the rural roads are
3 where we are having most fatalities; that's where
4 the increases are happening.
5 CFO GALLAGHER: Which is almost an impossible
6 place to really patrol.
7 MR. DICKINSON: It's tough. We just got more
8 cars, quite frankly. We dealt with our cars in
9 the last decade in the state. So something we are
10 paying attention to with your local law
11 enforcement.
12 CFO GALLAGHER: Thank you. That's an
13 approval, I guess. Did we approve this? Second.
14 GOVERNOR BUSH: Moved. Charlie made the
15 motion.
16 GENERAL CRIST: All right.
17 GOVERNOR BUSH: You seconded it. Without
18 objection, it passes.
19 MR. DICKINSON: Items 3 and 4 are part of our
20 new driver's license system.
21 Item 3 is the agreement to extend the
22 current contract which runs out in September
23 with Unisys, who is the vendor we have had for
24 the last seven or eight years. We are
25 proposing to add an additional year on while we
. 40
1 phase in the new contract, which is item 4 of
2 your agenda.
3 This was budgeted in our last budget. The
4 increase is from 53.9 cents to 99 cents per
5 license. And as I said, it will be phased in.
6 We'll start implementing the new license
7 sometime after the first of the year.
8 GOVERNOR BUSH: Are these real licenses?
9 CFO GALLAGHER: If your name is Joe Sample.
10 GOVERNOR BUSH: It's my picture.
11 MR. DICKINSON: Those are sample licenses.
12 CFO GALLAGHER: We all have new names, Joe
13 Sample. I am going to say I am really you, Joe
14 Sample.
15 GOVERNOR BUSH: Think it will work with the
16 press.
17 CFO GALLAGHER: Just say it's not me. Go
18 find Joe.
19 Fred, it is so frustrating to realize that
20 it takes -- this is a really important move
21 with the security that's in it, all the good
22 things that it has, and realize that -- what,
23 are we 2018 before every driver has one?
24 MR. DICKINSON: Not necessarily, but yes, sir
25 they could technically stay out for three more or
. 41
1 two more renewals after their current expires.
2 CFO GALLAGHER: That's just like -- let me
3 ask you a question.
4 What we need here is -- we got most
5 peoples' pictures already. They get a renewal,
6 I guess you are talking about sending them a
7 sticker instead of a new license?
8 MR. DICKINSON: It depends on which license
9 they currently have in their renewal cycle as to
10 what they will get.
11 If they are digitized currently, when they
12 come through the renewal, the new license will
13 actually be what they get.
14 If they are not currently digitized, then
15 they will get the sticker still on the back of
16 their --
17 CFO GALLAGHER: How many people are not
18 currently digitized?
19 MR. DICKINSON: I think we are currently at
20 70 -- 2 million left out of 15.
21 CFO GALLAGHER: 15 million Florida driver
22 licenses, we only got 16 million people. I better
23 check and make sure my four-year old doesn't have
24 one. There is 15 million?
25 MR. DICKINSON: I think 15.1 on our database.
. 42
1 That was as of yesterday.
2 GOVERNOR BUSH: We got a lot of people that
3 live in the state that aren't residents.
4 CFO GALLAGHER: And have a Florida license?
5 MR. DICKINSON: You have a lot of foreign
6 nationals that come in for months at a time on
7 business or whatever.
8 GOVERNOR BUSH: A lot of Yankees, too.
9 MR. DICKINSON: A lot of Yankees,
10 Canadians --
11 CFO GALLAGHER: Do we let them have dual
12 licenses? Their own state and here too?
13 MR. DICKINSON: According to national law,
14 you can only possess one driver's license at a
15 time, but we do have a Florida-only driver's
16 licence, which is good only in Florida, which a
17 lot of people do get because it helps them with
18 local banks, things of that nature.
19 CFO GALLAGHER: It's like an ID card?
20 MR. DICKINSON: Of course, the ID is also
21 available, but that has to go through the same
22 requirements as a driver's license.
23 CFO GALLAGHER: So you got two million left.
24 Isn't there some way that when somebody doesn't
25 have a digital, you make them come in over the
. 43
1 next couple of years, as opposed to waiting until
2 2018.
3 It's just so frustrating; here's a number
4 that's 16 years out, 15 years out.
5 MR. DICKINSON: The two million are probably
6 at the tail end of the cycle, so they will be
7 coming in. But we can get you some figures on
8 that.
9 And I will tell you right now. It's
10 typical when we change licenses for people to
11 come in and grab the new license. So that
12 number is probably going to shrink
13 substantially in the next year.
14 GOVERNOR BUSH: How do you get a 15-year
15 outyear time?
16 MR. DICKINSON: The law provides for you to
17 come in and get a license and then have two
18 renewal cycles. And if you are a safe driver, you
19 can get those renewal cycles for up to six years.
20 GOVERNOR BUSH: Automatically?
21 MR. DICKINSON: You can come in through the
22 Internet or mail-in or phone in. We are doing
23 that, Governor, to try to keep the lines smaller,
24 lines shorter, keep the people out of our office.
25 We did that some time ago.
. 44
1 CFO GALLAGHER: I remember well doing it
2 when, especially in Miami, the lines, we were
3 under huge pressure to do something about the
4 pressure of the lines where they were around the
5 corner and there would be 50 or a hundred people
6 in line at 7 o'clock in the morning.
7 That's gone, right? That's not gone?
8 MR. DICKINSON: No, sir, there are still
9 lines.
10 GOVERNOR BUSH: Still lines? Like Coral
11 Gables, there when you go to work, still there.
12 MR. DICKINSON: They are still substantial,
13 but we've done a number of them.
14 The 9/11 situation has caused some longer
15 lines for the foreign nationals. We are
16 scanning all the documents, which takes a
17 little extra time, but we are trying to provide
18 them with as much information on the front end
19 so they come up with those documents.
20 We have a direct hookup with Social
21 Security to verify the Social Security number.
22 We are in much closer contact with INS, the new
23 name is --
24 GOVERNOR BUSH: I will tell you one thing,
25 the fake ID for teenagers to go get a six-pack of
. 45
1 beer; with this thing, there ain't no way.
2 MR. DICKINSON: It's going to be tough.
3 CFO GALLAGHER: It's going to be 2018 before
4 they are going to have them.
5 MR. DICKINSON: I might add that anybody that
6 has come in that has turned 16 in the last eight
7 years has the new license. So anybody that comes
8 in for an original right now is going through the
9 new process.
10 CFO GALLAGHER: That's good news. But they
11 are not going to get these because you are not
12 going to start doing these until January?
13 MR. DICKINSON: That's correct.
14 CFO GALLAGHER: I think it's great, but it
15 takes so long. I guess because we have 15 million
16 of anything, it takes a long time.
17 MR. DICKINSON: If we could do item 3, I
18 think we can talk about that license for item 4.
19 CFO GALLAGHER: I will move 3.
20 GENERAL CRIST: Second.
21 GOVERNOR BUSH: Moved and seconded. Without
22 objection, the item passes.
23 Item 4.
24 MR. DICKINSON: Item 4 is our new driver's
25 license contract that we really have been talking
. 46
1 about here before us.
2 It is the culmination of a pretty
3 long-term project. We met with a number of
4 stakeholders, lending institutions, law
5 enforcement; Governor, you appointed a Grand
6 Jury on identity theft that we worked very
7 closely with. It's a more secure process. We
8 have layers and layers of security. And a
9 couple of them we will go over in a second.
10 CFO GALLAGHER: Fred, if I may. I hate to
11 interrupt you, but we just extended the Unisys
12 contract for a year until next October, right?
13 MR. DICKINSON: That's correct.
14 CFO GALLAGHER: All the licenses that -- have
15 digitized photographs and everything that we renew
16 with them over the next year, can't you keep that
17 information in a server; and as soon as these guys
18 are up and running, issue those people new ones
19 with this? Or would that mean they would have
20 two?
21 MR. DICKINSON: I guess technically we could.
22 There is a little revenue stream there that we
23 probably need to cross there at some point. But
24 we could certainly look at expediting that
25 process.
. 47
1 We have that capability technologically
2 speaking. There are some other issues
3 administratively that we probably have to deal
4 with. But yes, the answer to the question is,
5 yes, we have the information on file.
6 CFO GALLAGHER: Instead of issuing them a
7 brand new one, send them a piece of paper and then
8 ship them this as soon as this is cranking out.
9 MR. DICKINSON: We can certainly look at
10 that. I hear what you are saying. I think you
11 want to accelerate the process to make sure we get
12 as many people on board as possible, as quickly as
13 possible, to make sure our information is updated
14 and they have the most secure document in their
15 hand. We couldn't agree with you more and we will
16 certainly look to try --
17 CFO GALLAGHER: This is just a frustration,
18 this is driving me crazy, 2018. It's just hard to
19 believe. Go ahead. I am sorry.
20 MR. DICKINSON: These are -- this contract is
21 really an integration of a process. Right now we
22 have a stand-alone driver's licensing process. We
23 are integrating not only the data systems, but
24 everything in the office with regard to scanning,
25 picture taking, testing and the equipment that
. 48
1 runs the actual program.
2 This is a five-year contract with a
3 five-year renewal option, and a technology
4 fresh, refreshed within five years for the same
5 price.
6 There is also a backbone for ports access
7 credentialing, which is a bill that passed
8 during the session. We are doing some access
9 to the ports.
10 In that regard, we are in the design phase
11 of that right now, and there will be -- if
12 there is any changes in what we do with the
13 current system, such as change orders or bid or
14 anything like that, we will be back to you for
15 approval of that process.
16 CFO GALLAGHER: What you are saying is right
17 now, the contract that we are going to approve is
18 for driver's license only?
19 MR. DICKINSON: That's correct.
20 CFO GALLAGHER: And if we use -- the easiest
21 thing would be to use this company to issue the
22 port identification cards, which is sort of a
23 different deal than the driver's license; that
24 changes, you will negotiate and bring back?
25 MR. DICKINSON: Yes, sir, and the Feds are
. 49
1 involved here.
2 CFO GALLAGHER: Port security.
3 MR. DICKINSON: TSA are issuing some
4 guidelines for this program, so we are awaiting
5 those.
6 Also we have a new program coming on board
7 where we have to fingerprint and background
8 check, which is basically what we are doing for
9 all the port access for all the hazardous
10 material holders; they hold an endorsement on
11 their driver's license; so that's another
12 program that will be kind of inside this web.
13 But we need this new process to get all these
14 accomplished.
15 But yes, sir, we'll be coming back to you
16 for any changes we make.
17 If you will, I think you have the
18 driver's license in front of you. And I will
19 go over it quickly. You have your driver's
20 license.
21 GOVERNOR BUSH: Mr. Sample's.
22 CFO GALLAGHER: We have Joe's license with
23 our picture on it.
24 MR. DICKINSON: We have several layers of
25 security, as I mentioned. There are over 17 -- I
. 50
1 want to go over three or four of them with you.
2 The first overt security that is visible
3 to the eye would be the ghost image which is
4 middle way, lower part of the license, I think
5 you can see that.
6 GOVERNOR BUSH: Little Joe.
7 MR. DICKINSON: There is a customized print
8 overlay there where the actual data field is over
9 the ghost image, which is hard to replicate.
10 Also on the covert side, and you can use
11 this -- you find this with your magnifying
12 glass, UV light or bar code reader, or mag
13 stripe; and under that you see another ghost
14 image, which is in the lower right-hand corner.
15 You turn on the -- this is the black
16 light -- should be in the lower right-hand
17 corner, should have three pictures under black
18 light on that license; hopefully all of
19 yourself, Joe Sample.
20 GENERAL CRIST: You said on the covert side?
21 Is that like the back?
22 MR. DICKINSON: No, these are ones that can't
23 be seen by the naked eye, so you have to use a
24 tool, the black light or mag glass. Does it not
25 show the ghost image on the right-hand lower
. 51
1 corner? It should be right here on your license.
2 With the black light, it may be too bright up
3 there.
4 GOVERNOR BUSH: We trust you. You don't to
5 have to turn out the lights for everybody.
6 CFO GALLAGHER: We are good.
7 MR. DICKINSON: On the backside, there is
8 some forensic numbers that can be seen in the
9 laboratory setting.
10 I think you've got the bottom line. We
11 are trying to be more secure. Identity theft
12 is one of our top -- that was one of the big
13 things we were working on until 9/11 hit.
14 Security hit all the states.
15 We are very comfortable with this company,
16 it's probably the largest manufacturer of
17 driver's licenses in the nation. We've got a
18 very competitive deal, so --
19 CFO GALLAGHER: Fred, let's think a second.
20 Does this contract we have, as things go
21 along this -- you can look at this license
22 compared to what we are issuing right now, it's
23 miles and miles ahead. The one before that,
24 the one we have now, was miles ahead.
25 They are making changes for this kind of
. 52
1 stuff. Two things happen: One, people can
2 copy it because they figure out how, they have
3 done it on the past ones. And two, there is
4 new ways to make it hard to copy.
5 Does this contract have some way that we
6 stay ahead of the guys that are figuring out
7 how to make one of these?
8 MR. DICKINSON: Governor, if I may, yes, sir
9 it does. Plus there is an automatic technology
10 refresh after five years.
11 And additionally, if there are any changes
12 made at the federal level or through AMBA or
13 our trade association, where we may come into
14 some new standards, they've also agreed by
15 contract, they are in the bid specs, to
16 accommodate that.
17 CFO GALLAGHER: One other question. With the
18 identity theft problem and these being as secure I
19 guess as there is in the marketplace today, is
20 there some way that we might want to -- if I want
21 to come get a new driver's license -- I don't have
22 one of these but I know it's really good for my
23 identification, can I come in and get one?
24 MR. DICKINSON: Absolutely.
25 CFO GALLAGHER: And I've got to pay a fee?
. 53
1 MR. DICKINSON: If in your renewal cycle --
2 CFO GALLAGHER: Let's say I am not.
3 MR. DICKINSON: If you are not, then you will
4 pay $10 for a duplicate fee.
5 CFO GALLAGHER: So this is something that we
6 might would do two things. One, it would move
7 that 2018 closer and maybe we should spend a
8 little money telling people to come in and get new
9 one so they have a good solid ID that's not
10 copyable.
11 MR. DICKINSON: As I said, if they are in the
12 digitized phase, they don't even have to come in;
13 we can mail it to them.
14 CFO GALLAGHER: But they've got to send you
15 10 bucks?
16 MR. DICKINSON: Yes.
17 CFO GALLAGHER: You take credit cards?
18 MR. DICKINSON: We do take credit cards.
19 It's coming. It's we are very close to -- we are
20 close to doing away with the convenience fee that
21 we have to charge on a credit card which is a
22 3-dollar fee. I hope within a month the Governor
23 gets to announce that we are --
24 CFO GALLAGHER: Aren't you using our Treasury
25 program?
. 54
1 MR. DICKINSON: We are. I believe we are,
2 but I think we had to come up with a convenience
3 fee to take care -- we can't discount.
4 GOVERNOR BUSH: Started to be paid a
5 convenience fee --
6 CFO GALLAGHER: There is a problem with that,
7 that the credit card companies don't let you do
8 that. So another time.
9 MR. DICKINSON: Yes, sir. To be continued, I
10 hope.
11 CFO GALLAGHER: There is an excellent
12 challenge on that particular instance, by the way.
13 My division director, Treasury, has been wanting
14 to take them to court for years.
15 GOVERNOR BUSH: Do we have a --
16 CFO GALLAGHER: Motion on 4.
17 GENERAL CRIST: Second.
18 GOVERNOR BUSH: There is a motion and a
19 second on item 4. Without objection, the item
20 passes.
21 Now, the most exciting part -- this is
22 what I have been waiting for the whole summer.
23 CFO GALLAGHER: It's been so long since we
24 had new plates. What are we up to now, Fred?
25 MR. DICKINSON: This will make 76.
. 55
1 GOVERNOR BUSH: We are still not number 1,
2 though, are we?
3 MR. DICKINSON: I finally have a report.
4 CFO GALLAGHER: There is 12 more that are not
5 even here yet.
6 MR. DICKINSON: We are number 7.
7 GOVERNOR BUSH: God, we've fallen back in my
8 tenure as Governor.
9 MR. DICKINSON: We dropped to number 8.
10 Maryland has 500 plates.
11 CFO GALLAGHER: 500? We'll never match that.
12 MR. DICKINSON: You can be in a group of six
13 or more and get a plate, you have to have a group.
14 South Carolina, 266.
15 GOVERNOR BUSH: Sounds like the California
16 gubernatorial race.
17 CFO GALLAGHER: Everybody gets their own
18 plate.
19 MR. DICKINSON: I guess we can hold the
20 lottery for who gets the top plate.
21 New York at 249; Tennessee, 180; Virginia,
22 180; Missouri, 157; Louisiana, 144. And we
23 come in eighth.
24 GOVERNOR BUSH: I may lower my expectations a
25 little bit. Someone told me we were right behind
. 56
1 Virginia and they were number 1.
2 MR. DICKINSON: That was me in an early
3 meeting.
4 GOVERNOR BUSH: Unfortunately you gave us new
5 research that sets a cloud of depression, has
6 covered the --
7 CFO GALLAGHER: We could go for the fewest
8 plates, because we are not going to get the most.
9 GOVERNOR BUSH: Tell us what we have here. I
10 know we have Mahadevan and Galvano here for the
11 top plate, I believe.
12 MR. DICKINSON: Yes, sir, that would be the
13 reef, Protect our Reefs.
14 GOVERNOR BUSH: That's one of the prettiest
15 plates we have.
16 MR. DICKINSON: And then the other four are
17 independent colleges.
18 GENERAL CRIST: The Reef plate looks very
19 much like the Tampa Bay Estuary plate.
20 CFO GALLAGHER: Is that before pollution?
21 GENERAL CRIST: The Tampa Bay has a tarpon on
22 it instead of the coral.
23 GOVERNOR BUSH: Would you like to speak,
24 anybody here from any of the universities? I
25 know --
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1 MR. DICKINSON: I have two Representatives
2 here; obviously, Dr. Mahadevan and Dr. Main.
3 GOVERNOR BUSH: Doctor, do you want to speak?
4 He actually is working on the sublargest number of
5 sponsored plates.
6 MR. DICKINSON: This is the group that has
7 been working with the Pilot Whales in the Keys.
8 GOVERNOR BUSH: I know. That was great.
9 Doctor, come around the --
10 CFO GALLAGHER: Let the good doctor get to
11 the microphone.
12 REPRESENTATIVE DETERT: Governor, I would
13 just like to say, somebody suggested, and this
14 could put us number 1 in the license plate
15 department, that upon obtaining your driver's
16 license, you are issued a box of crayons and you
17 make your own plate.
18 GOVERNOR BUSH: That would definitely do it.
19 MR. DICKINSON: We could have 15 million
20 plates.
21 I am going to allow Kumar Mahadevan, Dr.
22 Mahadevan, from Mote Marine, whose idea this
23 was, and it's a beautiful plate. And as much
24 as we object, I have objected in the past to
25 having so many plates, but it's one way to fund
. 58
1 necessary things through tough budgetary times
2 and I think it's a very smart way to do
3 business. Doctor.
4 GOVERNOR BUSH: Representative Nancy Detert.
5 DR. MAHADEVAN: Thank you, I would like to
6 introduce Bill Galvano who, in this capacity, he
7 is on our Board of Trustees.
8 I want to thank you all for approving this
9 because we think it's going to do a lot of good
10 for our Keys. Particularly as you know, we
11 have the continental reef in the United States
12 and all reefs are facing a lot of pressure.
13 And it is a national treasure.
14 And one of the difficulties we found in
15 our research and the conservation efforts in
16 the Keys is a number of the programs are very,
17 very much underfunded. And therefore, we see
18 this as a way of helping fill in some of the
19 gaps in research and conservation and
20 education.
21 GOVERNOR BUSH: Thank you. Congratulations
22 on the pilot, whales setting out to sea; that was
23 beautiful. I hope they survive. It looked like
24 they were pretty healthy.
25 REPRESENTATIVE GALVANO: Mr. Governor, I just
. 59
1 wanted to introduce Dr. Kevan Main. She did not
2 get introduced. She is one of the lead scientists
3 of Mote Marine. She deals mainly with the
4 aquaculture programs, but we are honored she came
5 up here as well to support the tag. And we are
6 glad to see this coming through.
7 Just an interesting fact for you all.
8 90 percent of sea life in total is depending
9 upon the reefs.
10 GOVERNOR BUSH: Excellent. Thank you all
11 very much. Can we get a picture?
12 CFO GALLAGHER: Let's have a motion on 5.
13 GENERAL CRIST: Second.
14 GOVERNOR BUSH: There's a motion and
15 seconded. Without objection, the item passes.
16 And we have five more license plates.
17 (Picture taking.)
18 GOVERNOR BUSH: Administration Commission.
19 GENERAL CRIST: Motion on the minutes.
20 GENERAL CRIST: Second.
21 GOVERNOR BUSH: Moved and seconded. Without
22 objection, the item passes.
23 MR. DICKINSON: Governor, I wanted to mention
24 two items, if I could. Number one, a bill that
25 you signed recently on the At-risk Driver Council.
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1 We are cranking that up next month tentatively and
2 you will be --
3 GOVERNOR BUSH: This is part of the senior/18
4 year old --
5 MR. DICKINSON: Yes, sir, and you will be
6 getting a memo this afternoon to invite you to put
7 somebody on the board, should you so desire.
8 We'll keep you posted on that.
9 The second thing is we had a tornado drop
10 down in Palm Beach County on Thursday in a
11 mobile home park and we had our team on the
12 scene Friday. And I can report to you that the
13 mobile homes that were built to standards after
14 Hurricane Andrew, the new standards that came
15 in, and those that came in after the new rule
16 was passed after the Orlando tornadoes held
17 fast.
18 We'll get you a more detailed report
19 today. But the mobile home that went flying
20 was built to old standards, had substandard tie
21 downs, but everything that was tied down stayed
22 tied down. Thank you.
23 GOVERNOR BUSH: Thank you, Fred.
24
25
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1 GOVERNOR BUSH: There is a motion and second
2 on item 1. Without objection, the items passes
3 Item two. T-Square, how are you doing?
4 MS. TINKER: I am very fine.
5 CFO GALLAGHER: Motion to defer item 2.
6 GOVERNOR BUSH: There is a motion to defer
7 item 2. Is there a second? That's the Hendry
8 County Sheriff's budget appeal.
9 GENERAL CRIST: Second.
10 GOVERNOR BUSH: There's a second. Without
11 objection, the item is deferred.
12 MS. TINKER: And that will be deferred to the
13 August 26th meeting.
14 GOVERNOR BUSH: Until the August 26th
15 meeting.
16 MS. TINKER: Item 3, Governor, is the
17 Charlotte County Sheriff's Budget Appeal. Brad
18 Thomas, the policy coordinator for the Governor's
19 Office, is here to present the item, the staff
20 recommendation and introduce the speakers.
21 GOVERNOR BUSH: We have a -- we asked the
22 speakers, before you come up, Brad, to limit their
23 remarks for a certain amount of time?
24 MS. TINKER: Yes, we asked the speakers to
25 limit their remarks to a couple minutes each.
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1 GOVERNOR BUSH: How about five minutes each?
2 Is that enough? Everybody cool with that?
3 Whoever is going to speak? Okay.
4 MR. THOMAS: Thank you, Governor and Members
5 of the Cabinet.
6 The item before you is the final stage of
7 a process by which the Sheriff of Charlotte
8 County filed an appeal regarding the final
9 decision of the Charlotte County board of
10 county commissioners regarding his budget.
11 That appeal was heard by a panel, and I
12 would like to thank the Attorney General and
13 Treasurer for graciously sharing their
14 resources in that their colleagues served on
15 the panel with myself.
16 And the panel heard a presentation of the
17 budget issue by the Charlotte County sheriff's
18 office. That panel made a recommendation that
19 the Cabinet award $950,567 to the Charlotte
20 County Sheriff's Office.
21 This is the recommended order essentially,
22 to include $700,567 in the personal services
23 category and $250,000 in the capital outlay
24 category, for the recommendation to use 700,567
25 in the personal service categories -- category;
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1 to fund the 21 new positions as requested in
2 the sheriffs' budget request, and use the
3 $250,000 to fund equipment and vehicles for the
4 new positions.
5 That is the item before you. I would just
6 briefly say that the panel made a
7 determination, A, that two of the items
8 appealed by the sheriff should be rejected.
9 And that is he asked for $600,000 for an
10 annualization of positions that he never
11 filled.
12 And B, he asked for $488,000 for an
13 increase in medical insurance premiums that the
14 panel declined to recommend.
15 The panel did, however, recommend that the
16 sheriff's request for the 21 positions be
17 filled, i.e, be funded by the Cabinet.
18 There were several factors. Mr. Mitchell
19 made a point that per the statutes, the panel,
20 he determined that the panel should certainly
21 grant the sheriff quite a bit of respect and
22 deferral regarding his request.
23 And for my own particular purposes, I
24 looked at the sheriff's budget as a percentage
25 of the overall county budget, and also in
. 64
1 comparison to the comparable counties. And
2 both in terms of dollar amounts and in terms of
3 a proportion of the budget, a couple factors
4 that were mentioned was crime rate increasing
5 in Charlotte County, and that weighing all
6 those factors, the panel recommended the
7 $950,000 increase for those 21 positions.
8 At this time --
9 GOVERNOR BUSH: Could I ask a question?
10 Can you give us what the sheriff requested
11 in terms of the year-to-year increase in the
12 budget and what the county appropriated?
13 MR. THOMAS: Yes, sir, that is part of the
14 internal findings or internal comparison. The
15 budget approved by the board for the sheriff for
16 fiscal year 02/03 represents a two-year increase
17 of 16.5 percent essentially. The sheriff's
18 request --
19 GOVERNOR BUSH: What about the two years?
20 The year in question is -- we are not talking
21 about a two-year budget here, are we?
22 MR. THOMAS: No, sir, a one-year budget. I
23 believe this is an 8 percent increase for this
24 fiscal year, if I am not mistaken. I know it's a
25 16-point --
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1 GOVERNOR BUSH: He requested 11 percent and
2 the county gave an 8 percent increase; is that
3 right, something like that?
4 MR. THOMAS: Right around there, yes, sir.
5 GOVERNOR BUSH: 8.13 percent. Can you tell
6 me what the state law enforcement budget went up
7 this year? I can tell you.
8 MR. THOMAS: I thought you could. I have not
9 seen those documents provided by the county and,
10 of course --
11 GOVERNOR BUSH: I am not -- I haven't seen
12 any documents from the county. I am just trying
13 to put this in the right context here because
14 the -- we are talking -- we are not talking about
15 cuts; we are talking about cutting the growth from
16 somewhere between 11 plus percent to 8 percent.
17 Both of them are increases and it compares
18 quite favorably to the state law enforcement
19 increases where we are probably -- we grew by
20 about two and a half percent or something like
21 that.
22 MR. THOMAS: Significantly higher than the
23 state increases. The Florida Statutes provide
24 this board with -- this Cabinet with the authority
25 to review those budgetary increases. And your
. 66
1 question goes to internal factors and external
2 factors, but the increases were significant.
3 We specifically said during our panel
4 hearing that based on internal factors,
5 comparing him to other constitutional agencies
6 within Charlotte County, did not merit an
7 increase or appeal. We looked, at least I
8 focussed on external factors comparing to other
9 counties.
10 GOVERNOR BUSH: Okay.
11 MR. THOMAS: With that, I introduce the
12 sheriff of Charlotte County, if there are no
13 further questions.
14 GOVERNOR BUSH: Just for the record, I think
15 that this vote requires, because Commissioner
16 Bronson is not here, a unanimous vote, whatever we
17 decide to do, because it's the Governor and two
18 members of the Cabinet, which is all we've got
19 right now.
20 MR. THOMAS: Thank you, Governor. I
21 introduce Sheriff William Clement from Charlotte
22 County, Governor and Cabinet.
23 GOVERNOR BUSH: Good morning, Sheriff.
24 SHERIFF CLEMENT: Good morning, Governor,
25 Cabinet members. I am Bill Clement, Sheriff of
. 67
1 Charlotte County. And I would like to thank the
2 Cabinet for appointing a representative panel that
3 acted in a professional and reasonable manner, and
4 we were treated with respect and courtesy
5 certainly by accommodations whenever possible
6 during this process, and I would certainly like to
7 thank you for that.
8 We did appeal a total of 2.3 million that
9 was cut from our proposed budget this year. We
10 know without doubt that our request is
11 justified. Our population has increased
12 dramatically, our crime rate and calls for
13 service are also rising at an alarming rate.
14 I am sure that you are aware that
15 Charlotte County is the only remaining Scarlet
16 County as it relates to the DFC study of drug
17 proliferation in our schools and among our
18 youths.
19 It's fair to assume that our schools are a
20 microcosm of our community as a whole and we
21 have serious problems resulting from this
22 insidious problems resulting from the insidious
23 drug culture.
24 I recently spoke with Jim McDonough,
25 director of your drug control policy, to
. 68
1 explain the problem to him. He was quite
2 concerned and offered his assistance in
3 alleviating the serious problem.
4 The funds that you will provide today
5 hopefully will assist the Charlotte County
6 Sheriff's Office in filling a vital and
7 necessary role in reversing this destructive
8 trend.
9 A history of former budgets reveals a
10 history of inadequate funding for law
11 enforcement services. This phenomenon has been
12 documented back to 1994-95 budgets.
13 Only 33 positions have been added to this
14 office, law enforcement and support positions,
15 during the past eight years. That equates to
16 only 4.5 positions added per year and almost
17 all of these were grant funded. That leaves
18 only three positions that were added in the
19 eight-year period for law enforcement
20 positions.
21 We are here attempting to reverse this
22 dangerous and wholly inadequate trend.
23 Utilizing any rationale you care to apply, we
24 are lacking in law enforcement personnel.
25 We are paying the price for past budget
. 69
1 inequities, and we attempt to make -- as we
2 attempt to make realistic preparations for
3 future growth. We have discovered that on
4 average, counties in Florida fund their
5 sheriffs' offices on an average of 20 percent
6 of the total budget. Charlotte County has
7 funded -- Charlotte County sheriff's is funded
8 at a rate of 7.3 percent.
9 At this low rate, an annual increase of 7
10 or 8 percent is not adequate to fund rapidly
11 rising reoccurring costs and also plan in a
12 reasonable manner for our expected growth.
13 We undertook the appeal process without
14 trepidation, realizing that our position was
15 supported by facts and sound data. The astute
16 panel appointed by this body had examined the
17 facts and questioned the parties, finally
18 deciding in our favor.
19 Your representative reviewed the facts and
20 decided that the board of county commissioners
21 has not adequately funded the sheriff's office
22 this budget cycle. The county has the ability
23 to provide adequate resources needed to provide
24 for this public safety. Their primary
25 arguments against the appeal were found by the
. 70
1 panel to be without merit.
2 We have demonstrated an urgent need for
3 more personnel in the law environment and
4 communication divisions. We have made good
5 faith attempts to settle this with the county,
6 but they have not come to fruition.
7 We will place your good judgment and
8 prudent public safety of Charlotte County in
9 your hands. I am comfortable that you will
10 support the recommendations of Brad Thomas,
11 Paul Mitchell, and Tom Wheeler by voting to
12 fund the people of Charlotte County the 950,000
13 they require for adequate police protection.
14 Rest assured that these funds will be
15 utilized in the personnel services area and in
16 acquisition of necessary equipment, which is
17 recommended by the panel.
18 Another thing that I will close with is
19 this is not an issue of raising taxes. The
20 money is available. This is an issue of
21 reallocation of already existing resources
22 within Charlotte County.
23 As you look back to those, the study that
24 we did about the amount of percentage going to
25 the sheriffs in Florida, the average is
. 71
1 20 percent. We are getting 7.3.
2 We are going to need to raise that up just
3 a little bit to get the funding necessary to
4 cover reoccurring costs that we have no control
5 over and also plan for growth in a rapidly
6 growing county.
7 That is the issue here. It's not raising
8 taxes. In fact, we are not getting enough as
9 compared to other agencies. And the counties
10 that we were compared to, we are between four
11 and nine million dollars underfunded compared
12 to those counties of similar demographics.
13 Therein lies the problems. If we can get
14 our portion of the overall county budget raised
15 up a percent, maybe a percent and a half, then
16 we can do the things we need to pay for growth
17 and also fund reoccurring costs.
18 And hopefully a decision here on your part
19 can help us along that path that we can
20 continue to provide law enforcement services
21 the people in Charlotte County expect. Thank
22 you very much for your time.
23 GOVERNOR BUSH: Thank you, Sheriff.
24 CFO GALLAGHER: Sheriff, we got a letter from
25 William E. Clement -- or that's you, I am sorry.
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1 We got a letter from Mathew DeBoer, chairman of
2 the Charlotte County board, dated August 11.
3 SHERIFF CLEMENT: Yes, sir.
4 CFO GALLAGHER: This might be a real good
5 time for you to accept that offer, for whatever
6 it's worth. You might want to think about that
7 while they are talking.
8 SHERIFF CLEMENT: All right, sir. Thank you
9 very much.
10 GENERAL CRIST: Sheriff?
11 SHERIFF CLEMENT: I apologize.
12 GENERAL CRIST: Don't be silly.
13 Can you give us just a breakdown of the
14 administration you have in your department
15 versus cops on the street, deputies?
16 SHERIFF CLEMENT: We have about 230 some-odd
17 people that are certified, out of a total agency
18 population of about 480 plus, and there is 100 and
19 some odd that are in the jail. I can't give you
20 the administrative, but that is the basic numbers.
21 We can do a little --
22 GENERAL CRIST: So I understand, you have
23 about 480 in the department and about 230 on the
24 street?
25 SHERIFF CLEMENT: Yes, sir.
. 73
1 GENERAL CRIST: So more than half are
2 administrative, or maybe more appropriately, more
3 than half are not out on the street?
4 SHERIFF CLEMENT: That's very possible, yes,
5 sir.
6 GENERAL CRIST: Thank you, sir.
7 GOVERNOR BUSH: If you could, you mentioned
8 the drug issue. Where would these additional
9 people go to be able to deal with that?
10 SHERIFF CLEMENT: The way our budget was
11 going to allocate these positions, we would
12 probably have two going into narcotics, and we
13 would have I think eight going out in road patrol.
14 And some of those were going into CSA positions,
15 or out on the street and they are handling the
16 less serious calls and freeing up the deputies to
17 go on and do more serious things; we can fund them
18 cheaper than we can a deputy sheriff.
19 So all the people we have that are in this
20 question here will be out on the street in some
21 capacity which will help with the drug
22 situation. Some of those are going to have to
23 go in communications. We have been flat there
24 for eight years at 28 people.
25 GOVERNOR BUSH: Thank you. We'll now hear
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1 from someone, I guess from the county, if they are
2 here.
3 MR. THOMAS: Thank you, Governor and Cabinet.
4 At this point I would like to introduce Chairman
5 Mathew DeBoer, chairman of the Charlotte County
6 County Of commissioners.
7 GOVERNOR BUSH: Welcome, Mr. Chairman.
8 COMMISSIONER DeBOER: Thank you. I would
9 like to tell you it was a pleasure to be here but
10 I think I need to start off by apologizing for the
11 fact we are here. We don't like this process
12 either. We understand the position it puts the
13 Governor and Cabinet in, and we most certainly
14 sympathize with you on that respect.
15 I do have with me here Commissioner
16 Cummings, Commission DeVos, and Commissioner
17 Horton to offer their support. And in the
18 interest of time, I am going to breeze through
19 this as quickly as I possibly can.
20 GOVERNOR BUSH: How is the dredging at Stump
21 Pass going? On a lighter note.
22 CFO GALLAGHER: Done by now.
23 GOVERNOR BUSH: I hope it is.
24 COMMISSIONER DeBOER: At least this time we
25 got them dressed up. Last time --
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1 We did supply information that showed
2 that, in fact, the sheriff had, prior to being
3 elected, said the statistical information, the
4 methodology, the reporting was not proper in
5 Charlotte County.
6 Subsequent to his election the crime rates
7 did start to climb in Charlotte County, and
8 reported in the newspaper that they were -- the
9 sheriff's office staff was saying, in fact,
10 this was a reflection of the fact that the
11 methodology had been changed, so they are now
12 correctly being reported.
13 They had also built a website so that they
14 would facilitate the reporting of crime, that
15 there was not an increase in the crime rate in
16 Charlotte County, but the statistical
17 methodology was correct now.
18 When we looked at the crime rates that
19 were constantly being thrown out here, we used
20 the same crime statistics that your staff did,
21 that we pulled off the FDLE website. We don't
22 have the ability to manipulate those. We are
23 not in law enforcement.
24 When we looked at those, the crime index
25 per 100,000 population of 3258.1 of Charlotte
. 76
1 County. In southwest Florida, which we
2 consider to be the most relevant because
3 geographically, socially, demographically, the
4 similarities make it most relevant, we have the
5 second lowest crime rate in southwest Florida.
6 We understand it's also being said here
7 that the infamous Scarlet/Charlotte routine; I
8 think you should understand something. That
9 information, that report came out a year after
10 this budget was approved by Charlotte County.
11 It was not a consideration back at the time
12 when this budget was approved.
13 We are continually being told we underfund
14 the sheriff based on a percentage of the
15 county's budget, and I am making this as short
16 as I possibly can. I've got 28 years doing
17 this, and I can glass your eyes over by
18 accounting and I don't want to do that.
19 GOVERNOR BUSH: Please.
20 COMMISSIONER DeBOER: In Charlotte County,
21 because of the accounting methods and revenue
22 sources, there are restricted revenues that are
23 not available to the sheriff's office. When you
24 look at the recurring revenues, ad valorem taxes
25 that's available for law enforcement in Charlotte
. 77
1 County, 40.7 percent is funded to the sheriff's
2 office -- 40.7.
3 The only other county -- we are being
4 compared to other counties. The only other one
5 that we can do this long, drawnout analysis on
6 was Martin County; they were funded
7 42.5 percent, 1.8 percent difference in
8 recurring revenues available for law
9 enforcement actually go to that.
10 We did -- we understand that we are a
11 constitutionally created arm of the state and
12 we have done our due diligence in going through
13 this process. We did a number of analyses that
14 showed, in fact, Charlotte County, above
15 inflation and growth, has increased since '94,
16 '95, increased the sheriff's budget by over
17 33 percent of available revenues.
18 So I think if you look at that history --
19 and Governor, you were talking about amount
20 requested and what we did allocate to the
21 sheriff at a 8.13 percent increase, that was
22 well above inflation and growth in Charlotte
23 County. That's a history to be proud of. We
24 have, in fact, supported law enforcement
25 through the years by increasing the budget
. 78
1 gradually above growth and inflation each year.
2 We have a long history of doing that.
3 When we were here last week, the sheriff
4 even admitted that in two years he has been
5 here, that it's been over 8 percent each year.
6 Prior to that it was 10 percent a year was the
7 average.
8 So we are trying to use the same fiscal
9 constraints that you are. We did make an
10 offer, because I did promise your aide that I
11 was going to try to resolve this last week. We
12 did make an offer to prorate that based on the
13 their recommendation, based on the 49 days that
14 are left in this fiscal year; 49 days from now
15 the fiscal year ends and the sheriff must
16 return the money to us that he did not expend.
17 GOVERNOR BUSH: Your fiscal year does not end
18 July?
19 COMMISSIONER DeBOER: No, sir, October 1st to
20 the last day of September. That's one of the
21 quandaries we are in. When we look at these, we
22 have to look at proration for the rest of this
23 year plus --
24 GOVERNOR BUSH: This is for two budget years
25 then, for whatever --
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1 COMMISSIONER DeBOER: No, I am sorry, sir,
2 and I know the confusion in this is that the
3 process has taken so long.
4 GOVERNOR BUSH: Is this for next year's
5 budget?
6 COMMISSIONER DeBOER: No, sir. That one we
7 have to decide on the 9th of September.
8 CFO GALLAGHER: But your offer does basically
9 go into a 750 for next year?
10 COMMISSIONER DeBOER: That's what I was
11 suggesting, that what we do is prorate the amount
12 we give the sheriff right now, and that what we do
13 is we increase the base budget for next year so we
14 don't -- so those monies are annualized in next
15 year's budget. That was rejected and I want you
16 to know --
17 GOVERNOR BUSH: What's your proposed -- can
18 you tell us what the proposed budget is for the
19 sheriff's budget for next year? Is it up again?
20 COMMISSIONER DeBOER: Yes, sir. 21 percent.
21 He is asking for a 21 percent increase.
22 GOVERNOR BUSH: What are you guys -- you
23 haven't done your budget, but is it -- are we
24 going to be back here next year?
25 COMMISSIONER DeBOER: I can only speak as one
. 80
1 county commissioner. And I will tell you that
2 that's very, very likely. Even the impact of the
3 offer that we made right now would wipe out our
4 contingency fund, even though they say the money
5 is available.
6 The contingency fund is a rainy day fund
7 for the emergency that was just declared as a
8 matter of fact, the rains we had last month,
9 those are the monies we used for that.
10 GOVERNOR BUSH: So at $950,000, whatever the
11 money is, you take it out of reserves?
12 COMMISSIONER DeBOER: We would take it out of
13 our contingency account. There is less than
14 $500,000 left in that as yesterday.
15 GOVERNOR BUSH: How do you make an offer of
16 750 if it's --
17 COMMISSIONER DeBOER: It's prorated for the
18 49 days left in the fiscal year.
19 GOVERNOR BUSH: Got you.
20 COMMISSIONER DeBOER: Although we are
21 unwavering in our belief that we have supported
22 law enforcement, that our increases continuously
23 have been above growth and above inflation, we
24 made this offer because of the situation that
25 exists for you; it was rejected and we stand ready
. 81
1 to abide by your decision.
2 GOVERNOR BUSH: Thank you, Mr. Chairman. Is
3 there -- are there any other questions or
4 comments? Treasurer, would you like to --
5 CFO GALLAGHER: I would like to ask the
6 sheriff if he is ready to take it or probably get
7 nothing? You better make your decision right now,
8 Mr. Sheriff, because it takes a unanimous vote up
9 here for you to get anything.
10 SHERIFF CLEMENT: We can do that, Treasurer,
11 yes, sir.
12 CFO GALLAGHER: You will take nothing?
13 SHERIFF CLEMENT: No, we'll take the offer.
14 CFO GALLAGHER: Good move.
15 GOVERNOR BUSH: Is there a motion?
16 CFO GALLAGHER: I move --
17 GOVERNOR BUSH: You all are obviously good
18 with that?
19 CFO GALLAGHER: I move that we move to accept
20 the deal that's been made and accepted by the
21 sheriff.
22 GENERAL CRIST: Second.
23 GOVERNOR BUSH: Let's just be clear. The
24 letter that was sent to you, you accept, Sheriff?
25 SHERIFF CLEMENT: (Nods affirmatively.)
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1 CFO GALLAGHER: August 11, 2003.
2 SHERIFF CLEMENT: Yes.
3 GOVERNOR BUSH: Very good, because it's not
4 just about the 750.
5 CFO GALLAGHER: No, there is 250 upfront,
6 it's all spelled out right here. Everybody
7 understands it?
8 GOVERNOR BUSH: Very good.
9 GENERAL CRIST: So the motion incorporates
10 the letter?
11 CFO GALLAGHER: The motion incorporates the
12 letter.
13 GOVERNOR BUSH: Thank you. There is a motion
14 and second. Without the objection, the item is
15 approved unanimously.
16 Thank you, Sheriff. Mr. Chairman, thank
17 you.
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1 GOVERNOR BUSH: Florida Land and Water
2 Adjudicatory Commission. She's back.
3 MS. TINKER: I am back.
4 Item 1, recommend approval of the minutes
5 of the May 28, 2003 meeting.
6 GENERAL CRIST: Motion.
7 CFO GALLAGHER: Second.
8 GOVERNOR BUSH: Moved and seconded. Without
9 objection, the item passes.
10 Item 2.
11 MS. TINKER: Item 2, recommend approval of
12 the proposed final rule establishing the
13 Cocohatchee Community Development District in Lake
14 County.
15 GENERAL CRIST: Motion.
16 CFO GALLAGHER: Second.
17 GOVERNOR BUSH: Moved and seconded. Without
18 objection, the item passes.
19 MS. TINKER: Item 3, recommend approval of
20 the proposed final rule amending the name and
21 boundaries of the Fiddler's Creek Community
22 Development District in Collier County.
23 CFO GALLAGHER: Motion.
24 GENERAL CRIST: Second.
25 GOVERNOR BUSH: Moved and seconded. Without
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1 objection, the item passes.
2 MS. TINKER: Thank you.
3 GOVERNOR BUSH: Thank you.
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1 GOVERNOR BUSH: Siting board.
2 CFO GALLAGHER: Motion on the minutes.
3 GENERAL CRIST: Second.
4 GOVERNOR BUSH: There is a motion on minutes
5 and second. Is David Struhs here?
6 We never had this problem before, at least
7 since I have been Governor. What do you do?
8 We can defer it. Or we can do it without him,
9 I guess.
10 CFO GALLAGHER: I will move the minutes.
11 GOVERNOR BUSH: Does beg the question about
12 what the next agenda item is.
13 CFO GALLAGHER: I will move the minutes.
14 GOVERNOR BUSH: There is a motion and second
15 on item 1. Without objection, the item passes.
16 CFO GALLAGHER: Now I guess we can hear from
17 Hines, Energy complex from Progress.
18 GOVERNOR BUSH: Item 2.
19 MR. PALMER: Steve Palmer, Department of
20 Environmental Protection.
21 GOVERNOR BUSH: Thank for you being here.
22 MR. PALMER: Item 2 is the Progress Energy
23 site certification for a power plant to be
24 constructed on their site at Polk County.
25 Progress Energy used to be Florida Power
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1 Corporation. The Power Corporation is
2 proposing to build a 530-megawatt combined
3 cycle unit that would be fired by natural gas
4 as fuel oil as a backup.
5 It's on an existing site that has an
6 ultimate -- has been certified for an ultimate
7 capacity of 3,000 megawatts. And this is a
8 continuation of the particular site.
9 And the recommendation was for approval on
10 this.
11 GOVERNOR BUSH: Any discussion?
12 CFO GALLAGHER: Motion on 2.
13 GENERAL CRIST: Second.
14 GOVERNOR BUSH: Moved and seconded. Without
15 objection, the item passes.
16 Thank you.
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1 GOVERNOR BUSH: Board of Trustees.
2 CFO GALLAGHER: Motion on the minutes of
3 March 13, March 28, April 8 and April 22, Cabinet
4 meetings.
5 GENERAL CRIST: Second.
6 GOVERNOR BUSH: There's a motion on item 1
7 and a second. Without objection, the item passes.
8 MR. STRUHS: Good morning.
9 CFO GALLAGHER: I will move to defer item
10 number 2.
11 GOVERNOR BUSH: There is a motion to defer
12 item 2. Is there a second?
13 GENERAL CRIST: How about an explanation?
14 GOVERNOR BUSH: David, there is a request for
15 an explanation of why this item is being deferred.
16 MR. STRUHS: This item was deferred because
17 our staff is continuing to negotiate with various
18 constituents and stakeholders, environmental
19 community members, the voting interests, property
20 owners to make --
21 GOVERNOR BUSH: There is a motion and a
22 second. Without objection, the item is deferred.
23 Item 3.
24 MR. STRUHS: Item 3, Governor, is an
25 interesting item in that upon further review and
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1 reflection, it occurred to me that this is an item
2 that arguably does not even have to come before
3 the Board of Trustees.
4 We actually went back and read the
5 Everglades Forever Act in some detail, and
6 indeed the statute compels that these leases be
7 automatically renewed.
8 Now the fact is it's already on the agenda
9 and it's a useful discussion to have. But our
10 reading of the law is that this lease renewal
11 meets all the requirements and should be
12 renewed automatically.
13 CFO GALLAGHER: Motion on 3.
14 GENERAL CRIST: Second.
15 GOVERNOR BUSH: Moved and seconded. Without
16 objection, the item passes.
17 MR. STRUHS: Item number 4 is Gulf Stream
18 Natural Gas System. This is consideration of a
19 request for approval of an amendment to an
20 existing easement. We would recommend approval of
21 the item.
22 GENERAL CRIST: Motion.
23 CFO GALLAGHER: Second.
24 GOVERNOR BUSH: Moved and seconded. Without
25 objection, the item passes.
. 89
1 MR. STRUHS: Item number 5, we need to have
2 the Board of Trustees declare as surplus land
3 under the Florida -- the Florida constitution
4 requires the Board to declare land surplus so we
5 can do an exchange with the City of Lakeland.
6 CFO GALLAGHER: Motion on 5.
7 GENERAL CRIST: Second.
8 GOVERNOR BUSH: Moved and seconded. Without
9 objection, the item passes.
10 CFO GALLAGHER: Motion to defer 6.
11 GOVERNOR BUSH: There is a motion to defer
12 item 6 and a second.
13 GENERAL CRIST: Second.
14 GOVERNOR BUSH: Without objection, the item
15 is deferred.
16 MR. STRUHS: We recommend approval of item
17 number 7, which is two acquisitions in the Green
18 Swamp Area of Critical State Concern.
19 GENERAL CRIST: Moved.
20 CFO GALLAGHER: Second.
21 GOVERNOR BUSH: Moved and seconded. Without
22 objection, the item passes.
23 MR. STRUHS: Item 8, it's recommending
24 approval of an option agreement to acquire
25 7.1 acres as an expansion of the state park in
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1 DeLeon Springs.
2 CFO GALLAGHER: Motion on 8.
3 GENERAL CRIST: Second.
4 GOVERNOR BUSH: Moved and seconded. Excuse
5 me. Is this the item that the value was
6 questioned?
7 CFO GALLAGHER: 43,000 an acre.
8 GOVERNOR BUSH: $43,000 is a dollar a foot
9 more or less for a piece of property that is --
10 can be replatted, I guess, to one unit per
11 5 acres. How did you get this evaluation?
12 MR. STRUHS: That evaluation was done based
13 on comparable sales, three comps, that were within
14 one month of this appraisal. We saw --
15 GOVERNOR BUSH: Are you telling me that a
16 piece of property that -- what's the access to it?
17 MR. STRUHS: I think it actually has some
18 frontage and I have a map here.
19 GOVERNOR BUSH: If it's one unit per 5 acres,
20 and it's roughly a dollar per foot, we are talking
21 about $5 per foot for -- it's not going to help
22 us.
23 MR. STRUHS: We have -- the property, as you
24 probably know from your notes, is 980 feet of
25 waterfrontage. It backs up to a state park.
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1 We looked at three comps where we had
2 approximately $100,000 per acre. That was
3 within one month of this appraisal. And we had
4 another comp on a less desirable parcel on a
5 lake at $32,000 per acre. This came in at
6 43,600.
7 GOVERNOR BUSH: All these acres are
8 developable?
9 MR. STRUHS: Yes, the current --
10 GOVERNOR BUSH: I thought there was an
11 easement issue, the 2 acres weren't accessible.
12 MR. STRUHS: I don't believe so.
13 TREASURER GALLAGHER: It says that there's
14 two easements on the southern portion of the
15 property that provides access to two residences
16 along the lake.
17 MR. STRUHS: The easements were take into
18 consideration.
19 CFO GALLAGHER: There were taken into
20 consideration?
21 MR. STRUHS: Yes, they were.
22 CFO GALLAGHER: They won't affect the
23 management?
24 MR. STRUHS: This is a very attractive
25 acquisition for the park.
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1 GOVERNOR BUSH: How many houses can be built
2 on this property?
3 MR. STRUHS: It's currently zoned one per
4 five.
5 GOVERNOR BUSH: Right, but you can't -- you
6 can build one.
7 MR. STRUHS: That's right.
8 GOVERNOR BUSH: What we are saying is that --
9 CFO GALLAGHER: 7 acres, so you could build
10 seven houses?
11 GOVERNOR BUSH: No, one.
12 CFO GALLAGHER: One house, maybe two.
13 GOVERNOR BUSH: I think only one.
14 CFO GALLAGHER: There is already two on
15 there, isn't there? So you can't build any?
16 GOVERNOR BUSH: You have to -- you have to
17 take down the two, I guess, if you wanted to
18 redevelop.
19 CFO GALLAGHER: We are not buying the two
20 houses on there, are we?
21 MR. STRUHS: Yes, I would just point out
22 there is, unrelated to this transaction, there is
23 a small inholding which would be the only
24 remaining piece that's part of this park's
25 long-term acquisition strategy. This item before
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1 you today virtually completes a very important
2 project.
3 CFO GALLAGHER: When do we get the inholding?
4 MR. STRUHS: The inholding is currently held
5 by an elderly woman who has, through her family,
6 offered to us that at the appropriate time they
7 would offer to the state first for sale.
8 GOVERNOR BUSH: I would like to get a better
9 understanding of the appraisals that would yield
10 this kind of --
11 CFO GALLAGHER: I move to defer for two more
12 weeks.
13 GENERAL CRIST: Second.
14 GOVERNOR BUSH: There is a motion to defer
15 and a second. Without objection, the item will be
16 deferred for two weeks.
17 Item 9.
18 MR. STRUHS: Item 9, we recommend approval of
19 this item. This is a partnership with Brevard
20 County for the Brevard coastal scrub ecosystem
21 project.
22 GENERAL CRIST: Motion.
23 CFO GALLAGHER: Second.
24 GOVERNOR BUSH: Moved and seconded. Without
25 objection, the item passes.
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1 MR. STRUHS: Item 10.
2 CFO GALLAGHER: Motion to defer 10.
3 GENERAL CRIST: Second.
4 GOVERNOR BUSH: There is a motion to defer
5 and a second. Without objection, the item passes.
6 CFO GALLAGHER: Motion to defer 11.
7 GENERAL CRIST: Second.
8 GOVERNOR BUSH: Motion to defer item 11 and a
9 second. Without objection, the item passes.
10 CFO GALLAGHER: Motion to defer 12.
11 GENERAL CRIST: Second.
12 GOVERNOR BUSH: There is a motion to defer
13 item 12 and a second. Without objection, the item
14 passes, is deferred -- excuse me, not passes. You
15 got that?
16 Item 13.
17 MR. STRUHS: Item 13, we recommend approval,
18 subject to a special approval conditions, special
19 easement conditions and the payment of $103.95 for
20 the severance of sovereignty material.
21 This grants an easement for Florida
22 Teleport to provide over submerged lands cable
23 access, fiber optic access, to the southeast
24 coast of Florida.
25 GENERAL CRIST: Question. Are these going
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1 into the gaps, David? We had a long discussion
2 about that issue.
3 MR. STRUHS: Yes, sir. This is really a good
4 example, I think, of the benefits that are already
5 being realized by your, the Cabinet's, attention
6 to the importance for protecting the coral reefs.
7 I think the discussions that you all have
8 had on this subject over the last two years has
9 really sensitized developers to the need to
10 site these things in a way that's protective of
11 the reef system. And this is a good example of
12 that.
13 GOVERNOR BUSH: Thank you. Any other
14 discussion on item 13? Is there a motion?
15 CFO GALLAGHER: Let me ask a question, if I
16 may.
17 We are working on rules, and I would like
18 to see some consistency. And I would like
19 whatever deal you finally end up with here, be
20 what you are going to come to us with as a
21 rule, so that either these people didn't get it
22 stuck to them because they were first or they
23 didn't get some great advantage because they
24 were first.
25 It ought to be as -- we need to level this
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1 thing out. I have been through this up and
2 down so many times now, I don't even care
3 anymore what the deal is; just make a fair deal
4 and let's make the rule be the deal and the
5 deal be the rule, or awfully close to it.
6 MR. STRUHS: We quite agree to that.
7 GOVERNOR BUSH: Would this deal then be
8 relatively --
9 MR. STRUHS: Yes, sir. I would be happy to --
10 CFO GALLAGHER: If you tell me that's what it
11 is doing, then I don't need any more.
12 MR. STRUHS: Thank you. I do unfortunately
13 have to go back to item 10 and ask --
14 GOVERNOR BUSH: Go ahead.
15 MR. STRUHS: I will like just for the record
16 ask that to be deferred until the date of
17 October 14; we need to put a date on that.
18 GOVERNOR BUSH: Item 10 will be deferred
19 until October 14.
20 MR. STRUHS: Thank you.
21 GOVERNOR BUSH: Item 13. Is there a motion?
22 GENERAL CRIST: Motion.
23 GOVERNOR BUSH: Second? That's the item we
24 were talking about.
25 CFO GALLAGHER: Okay. Fine. Second.
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1 GOVERNOR BUSH: Moved and seconded. Without
2 objection, the item passes.
3 Thank you all very much.
4 We welcome our friends from Miami. We
5 appreciate you being here to exercise your
6 First Amendment Rights to express your
7 opinions. Thank you all for coming up.
8 (The proceedings concluded at 11:00 a.m.)
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1
2 CERTIFICATE OF REPORTER
3
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6 STATE OF FLORIDA )
7 COUNTY OF LEON )
8
9 I, SANDRA L. NARGIZ, RMR, CRR, certify that I
10 was authorized to and did stenographically report the
11 proceedings herein, and that the transcript is a true
12 and complete record of my stenographic notes.
13 I further certify that I am not a relative,
14 employee, attorney or counsel of any of the parties,
15 nor am I a relative or employee of any of the parties'
16 attorney or counsel connected with the action, nor am I
17 financially interested in the action.
18 WITNESS my hand and official seal this 18th
19 day of August, 2003
20
21
22 ______________________________
23 SANDRA L. NARGIZ, RMR, CRR
2894 REMINGTON GREEN LANE
24 TALLAHASSEE, FL 32308
850-878-2221
25
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Cabinet
Affairs
